Opinion The United States has a debt problem. Biden’s budget won’t solve it.

(Video: Michelle Kondrich/The Washington Post)
7 min

Editor’s Note: This editorial is part of a series that looks at the challenges of tackling the growing federal debt and the specific programs that drive it. Read the next installment on Social Security.

An unfortunate mind-set has grown among our nation’s leaders. It is that the United States can overspend by more than $1 trillion a year indefinitely. Lawmakers assured the country that spending increases — for the wars in Iraq and Afghanistan, and then for economic support during the Great Recession and the pandemic — would be temporary. But, with few exceptions, the fatter budget items stuck around. President Biden released his budget proposal Thursday with a nearly $2 trillion deficit for 2024.

This willful blindness to reality on the part of policymakers has allowed the national debt to rise to more than $31 trillion. The nation has reached a hazardous moment where what it owes, as a percentage of the total size of the economy, is the highest since World War II. If nothing changes, the United States will soon be in an uncharted scenario that weakens its national security, imperils its ability to invest in the future, unfairly burdens generations to come, and will require cuts to critical programs such as Social Security and Medicare. It is not a future anyone wants.

Stabilizing the debt should be a top priority for Mr. Biden and Congress. That starts with setting a clear goal. A reasonable target would be aiming not to have the debt exceed the size of the economy (a 100 percent debt-to-gross-domestic-product ratio). Currently, the debt is 98 percent the size of the economy and on track to hit 118 percent in a decade, largely because of soaring costs from baby boomers retiring and heftier interest payments, according to the nonpartisan Congressional Budget Office. It doesn’t take a PhD in accounting to see the warning sign here: As debt gets bigger than the economy, the interest costs become so onerous that there is little money left for anything else. By 2033, the nation will be spending more on paying creditors than on the entire defense budget.

Notice that the Editorial Board is not advocating a balanced budget. That might sound ideal, but it’s unrealistic. Lawmakers would have to raise taxes or slash spending by $16 trillion to balance the budget over the next decade. Even the more modest goal of attempting to stabilize the debt as a size of the economy would take close to $8 trillion in savings, the Committee for a Responsible Federal Budget says. Mr. Biden proposed about $3 trillion in net savings over the next decade, achieved mostly by hiking taxes on the rich and a proposal for the government to pay less for the prescription drugs it buys through programs such as Medicare and Medicaid. He deserves credit for offering some cuts and revenue raisers, but his plan underscores the reality that getting anywhere close to what’s needed over the next decade will take heroic political efforts.

What almost no lawmaker wants to admit is that Democrats and Republicans share responsibility for the bulk of the debt. Instead, they point fingers. Mr. Biden blasts former president Donald Trump for running up the debt with big tax cuts that weren’t paid for. That leaves out the inconvenient fact that he, too, added substantially to the debt with extra pandemic aid approved only by Democrats. Meanwhile, Mr. Biden’s boast that he has reduced the budget deficit by $1.7 trillion since taking office earned him three Pinocchios from The Post’s fact-check team because the bulk of the reduction was going to occur regardless of who occupied the White House as emergency pandemic aid ended.

See how the national debt grew to $31 trillion

The scale of sobriety that is now necessary means we will need to do a lot more than lawmakers are acknowledging. Republicans falsely claim that the nation’s budget situation would be fine if it just cut back on welfare, waste and foreign aid. Democrats are equally misleading when they suggest it will take raising taxes on big businesses and the rich and perhaps shaving a bit off defense to get where we need to be.

Skip to end of carousel
  • D.C. Council reverses itself on school resource officers. Good.
  • Virginia makes a mistake by pulling out of an election fraud detection group.
  • Vietnam sentences another democracy activist.
  • Biden has a new border plan.
The D.C. Council voted on Tuesday to stop pulling police officers out of schools, a big win for student safety. Parents and principals overwhelmingly support keeping school resource officers around because they help de-escalate violent situations. D.C. joins a growing number of jurisdictions, from Montgomery County, Md., to Denver, in reversing course after withdrawing officers from school grounds following George Floyd’s murder. Read our recent editorial on why D.C. needs SROs.
Gov. Glenn Youngkin (R) just withdrew Virginia from a data-sharing consortium, ERIC, that made the commonwealth’s elections more secure, following Republicans in seven other states in falling prey to disinformation peddled by election deniers. Former GOP governor Robert F. McDonnell made Virginia a founding member of ERIC in 2012, and until recently conservatives touted the group as a tool to combat voter fraud. D.C. and Maryland plan to remain. Read our recent editorial on ERIC.
In Vietnam, a one-party state, democracy activist Tran Van Bang was sentenced on Friday to eight years in prison and three years probation for writing 39 Facebook posts. The court claimed he had defamed the state in his writings, according to Radio Free Asia. In the past six years, at least 60 bloggers and activists have been sentenced to between 4 and 15 years in prison under the law, Human Rights Watch found. Read more of the Editorial Board’s coverage on autocracy and Vietnam.
The Department of Homeland Security has provided details of a plan to prevent a migrant surge along the southern border. The administration would presumptively deny asylum to migrants who failed to seek it in a third country en route — unless they face “an extreme and imminent threat” of rape, kidnapping, torture or murder. Critics allege that this is akin to an illegal Trump-era policy. In fact, President Biden is acting lawfully in response to what was fast becoming an unmanageable flow at the border. Read our most recent editorial on the U.S. asylum system.


End of carousel

But here’s the good news: There is a path to stabilizing the debt that doesn’t require massive sacrifice. Americans with modest incomes can — and should — be largely insulated from giving more. The solutions, which the Editorial Board plans to lay out in an upcoming series of editorials, necessitate politicians moving off their favorite talking points.

There’s an urgency to address this. As CBO director Phillip Swagel said last month, “The longer we wait, the more challenging it gets.” Growing annual interest costs — which are on track to triple in the next 10 years — reduce funding for other programs and choke off investment in other parts of the economy.

The CBO projects Medicare will have to start making dramatic cuts to benefits by 2030 and Social Security by 2033. There’s another reckoning coming even sooner, at the end of 2025, when Mr. Trump’s individual tax cuts expire. The GOP made the corporate tax cuts permanent, but not the cuts for families. If the tax cuts are extended, the nation’s finances look worse. As Federal Reserve Chair Alan Greenspan put it in 2005 during a debate over extending George W. Bush’s tax cuts: “Instead of making the tax cuts permanent, we should be leveling with the American people about the fiscally shaky ground we are on.” Those words are even truer now.

Some will claim this is fearmongering. For decades, people have heard warnings that borrowing costs would spike and investors would shun U.S. debt when it became too high. A decade ago, this editorial page called a 70 percent debt-to-GDP ratio a “troubling level,” yet the nation has been able to exceed that without triggering a crisis. The economy has continued to thrive and investors — at home and abroad — still buy U.S. debt. But while it turns out the danger point was further away than many initially thought, it is getting closer. Other nations offer a warning. Japan with its 200 percent debt-to-GDP ratio has had years of sluggish growth. Greece and Italy have also had crises and near-crises. The other big difference versus a decade or two ago is that the baby boomer retirement is now upon us, hiking the government’s costs at a rapid rate.

Stabilizing the debt might not be a catchy campaign slogan, but the concept is simple to understand. It means putting the nation on a sustainable path to ensure there is money to provide for everything from education to defense to Social Security, not to mention the next security or economic calamity. Mr. Biden, Senate Majority Leader Charles E. Schumer (D-N.Y.) and Senate Minority Leader Mitch McConnell (R-Ky.) have been in office for decades. They played sizable roles in creating this mess. House Speaker Kevin McCarthy (R-Calif.) has been in Congress since 2007 and also shares the blame. Now, they have a chance to leave a different legacy: They can put aside their partisan gamesmanship and finally strike a deal that should have been done years ago.

The Post’s View | About the Editorial Board

Editorials represent the views of The Post as an institution, as determined through debate among members of the Editorial Board, based in the Opinions section and separate from the newsroom.

Members of the Editorial Board and areas of focus: Opinion Editor David Shipley; Deputy Opinion Editor Karen Tumulty; Associate Opinion Editor Stephen Stromberg (national politics and policy); Lee Hockstader (European affairs, based in Paris); David E. Hoffman (global public health); James Hohmann (domestic policy and electoral politics, including the White House, Congress and governors); Charles Lane (foreign affairs, national security, international economics); Heather Long (economics); Associate Editor Ruth Marcus; Mili Mitra (public policy solutions and audience development); Keith B. Richburg (foreign affairs); and Molly Roberts (technology and society).